Rooftop solar growth driving unprecedented changes to demand shape

Between 12 – 1 PM, on Sunday, October 11, 2020, solar power provided 100% of South Australia’s energy demand – a first in Australia and for any major jurisdiction globally. Cornwall Insight Australia has examined what impact this phenomenal growth in rooftop solar is having in the wholesale market and whether this is unique to South Australia.

The research highlights that although South Australia (SA) gets plenty of coverage due to its minimum demand records, other regions across Australia are undergoing much more impactful changes to their demand shape as a result of rooftop solar growth.

Key findings

  • In Queensland (QLD), the average middle of the day (11 AM – 1 PM) demand is ~126MW lower than it was FY14. This is despite the commencement of one of the world’s largest LNG export industries in FY15.
  • In QLD this is reversed, average demand during the evening peak (6 – 8 PM) is now ~910MW greater in FY20 than in FY14.
  • New South Wales (NSW) shows a similar trend with the middle of the day demand down ~780MW on FY14 levels and the evening peak demand increased by an average ~270MW.
  • Middle of the day demand in SA has dropped by an average of ~375MW on FY14 levels.

The below graph compares the average time-of-day operational demand for FY14 to FY20 (FY20 minus FY14).

time of day shape - rooftop solar

Lumi Adisa, Lead Consultant – Market Analysis and Business Development at Cornwall Insight Australia, said:

“In QLD, for the first time since the commencement of Liquefied Natural Gas (LNG) operations in 2015, the average middle of the day demand is now lower than it was in FY14. This clearly shows that the (midday) output from rooftop solar in the state is now greater than the increased demand from the LNG export industry.

“The fact that the situation flips a few hours later with average demand during the evening peak now greater in FY20 emphasises the increasing ramp (>1GW) and flexibility requirements in the QLD region.

“Interestingly, on this metric, SA has seen the lowest flux in time-of-day demand in the mainland. However, it should be noted the state also has the lowest overall demand.

“In Victoria (VIC), operational demand through the day has dropped significantly on FY14 levels, largely driven by industrial closures such as the Point Henry Smelter. However, as in other regions, reduced demand in the middle of the day exceeds the drop seen outside sunshine hours due to rooftop solar growth.

“Most of the supply impacts of these changes has been seen in thermal generation, especially black coal in recent years. In the last two years output from black coal in QLD has dropped by an average of 1.1GW between 11 AM – 1 PM.

“We have seen similar reductions in coal generation in NSW and to a lesser extent Victoria. As rooftop solar continues to play a big role in the National Energy Market’s (NEM’s) evolution, increasing flexibility requirements are expected to remain a feature of this two-sided market transition.”